anon01

The following situation has happened to me twice now, both times when the startup became funded by an angel or two (not a VC firm):

I am the scrappy developer and I invest my time to build a product. The other founder invests their money to pay a sales guy, create marketing material, legal, and do all the other necessities of a real business.

We demonstrate value, we get investment. I have shares that are valued at some amount and the co-founder has shares valued at some amount, but IN ADDITION, reimburses themselves for their upfront expenses. This essentially puts them at even for their investment, while I still have lost time to make up for.

The impetus for my post is that one startup, while generating revenue, is not profitable(sales expenses & admin expenses). The other founder wants to call it quits in the next couple months if we don't exit. They have been reimbursed for their expenses, while I have over 1000 hours of sweat in the company. Sure, I have theoretical value in my shares. However I don't think the angel would by them off me, so really I've got nothing if we stop.

So my question, is it normal procedure to be reimbursed upon investment? Am I not getting paid back for my sweat investment simply because I didn't think to put it in the contract? Do developers ever enter an agreement with a "Upon funding, previous time investment will be reimbursed at $X per hour" clause? Is my lack of sleep making me sound irrational and maybe I should take a few days off?